H.R.3395 - Middle Market IPO Cost Act (119th Congress)
Summary
H.R.3395, the Middle Market IPO Cost Act, directs the Comptroller General to study the costs that small- and medium-sized companies face when undertaking initial public offerings (IPOs). The study will analyze direct and indirect costs, compare IPO costs to alternative financing, and assess the impact on capital formation and retail investors. The Comptroller General must consult with the SEC and FINRA and report findings to Congress within 360 days of enactment.
Expected Effects
The bill's primary effect will be the creation of a comprehensive report on IPO costs for smaller companies. This report could inform future legislation or regulatory changes aimed at making public markets more accessible. The study may also influence investment decisions and strategies within the financial sector.
Potential Benefits
- Provides data-driven insights into IPO costs for small and medium-sized businesses.
- May lead to policies that encourage more companies to go public, increasing investment opportunities.
- Could improve access to capital for growing businesses.
- Enhances transparency in IPO pricing and related services.
- Potentially reduces barriers for retail investors to participate in IPOs.
Most Benefited Areas:
Potential Disadvantages
- The study itself has a cost, diverting resources from other potential uses.
- The 360-day timeframe means any potential benefits are delayed.
- The report's recommendations may not be implemented, rendering the study ineffective.
- The definition of "small- and medium-sized companies" is not explicitly defined, potentially leading to inconsistent data collection.
- The study's findings might be used to justify regulations that disproportionately affect certain market participants.
Constitutional Alignment
The bill aligns with the implied powers of Congress to regulate commerce and financial markets, as suggested by Article I, Section 8, Clause 3 (the Commerce Clause). The requirement for a study and report falls within Congress's power to gather information to inform legislative decisions. There are no apparent conflicts with specific constitutional limitations on Congressional power.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).